Wash trading refers to buying shares through one broker and selling the shares through another broker. Wash trading is not legal, as it is performed to manipulate the market and encourage other investors to move into a buying position. A quick turnaround of positions is not considered wash trading, provided the transaction creates market risk for the trader and alters his market position. Also known as round trip trading, the act of wash trading allows traders to buy stocks and then sell them, giving the appearance of purchases and sales being made, but the trader does not incur any market risk or change in market position. The Commodity Exchange Act (CEA) establishes regulations for the trading of commodity futures in the United States. Under the CEA, wash trading is illegal. The CEA was passed in 1936 and has been amended a number of times since its establishment. It replaced the Grain Futures Act of 1922 . This Act provides the statutory framework under which the Commodity Futures Trading Commission (CFTC) operates. The CFTC was created in 1974 as a result of the CEA. A wash sale is completely separate from wash trading. A wash sale is the sale of a security, such as stocks or bonds, at a loss. The same, or nearly the same, security is then repurchased quickly, within 30 days, either before or after the sale. Wash sales are used as collateral for margin debt ; they must be approved by the Federal Reserve Bank . In addition to a trader buying back the same security within the 30-day period, a wash sale is also approved if the trader acquires an identical security in a taxable trade or acquires an option or contract to buy the same security that was sold. Regulations surrounding wash sales are designed to protect an investor who carries an underlying loss and then wan Continue reading >>
Bitcoin Belongs More To The Realm Of Fraud Than Finance Or Economics Analyst
Bitcoin 'nuts' will hold cryptocurrency until price plummets to zero - Dr Doom Nouriel Roubini Bruno compares bitcoin to Monopoly money, which can be minted by private individuals. Its something akin to the New Testament, when Jesus multiplied the loaves of bread and the fish. According to the analyst, bitcoin is a bubble at best and Ponzi scheme at worst. Bruno says cryptocurrencies backed by gold or other assets can be a comfortable tool to invest in commodities, precious metals, etc., while bitcoin is backed by nothing. Bruno predicts that the price of bitcoin will fall, as regulators and banks around the world take a harsher stance on cryptocurrencies. Nouriel Roubini, famous for predicting the 2008 financial crisis, expects to increase the value of zero dollars. He warns that the US Congress hearings that will see Christopher Giancarlo, president of the Commodity Futures Trading Commission (CFTC), and Jay Clayton, president of the Securities and Exchange Commission (SEC), the two main financial market authorities testify on cryptocurrencies. That could set off more warnings. Cryptocurrencies have fallen dramatically over the last few weeks amid tighter regulation and government crackdowns and the ongoing US investigation on market manipulation. You may have noted that bitcoins dropped to $6,000 on Monday, Jan. 6. They recovered on Wednesday, but be careful. That, says Roubini, might be a manipulation tactic called wash trading to support the price of bitcoin. Wash trading occurs when someone who buys and sells a bitcoin, or a stock or any other asset to manipulate the markets, says Bruno. The blockchain technology behind bitcoin is here to stay, when bitcoin and what will remain after bitcoin is reduced to bits of dust. For more stories on economy & finance visit Continue reading >>
Wash Traders Will Increase Btc Price.. For A Short Period Of Time
Wash traders will increase BTC price.. for a short period of time Noted economist Nouriel Roubini thinks the price of bitcoin is going to zero. Dr Doom also said that traders will use wash trading to prop up the prices. Wash trading in the crypto world involves someone buying and selling their own order to manipulate markets. And artificially props up the trading volume. Other market participant are seeing that the volume is increasing and enters in the market as well. His tweets followed comments on Bloomberg last week in which he called bitcoin the "biggest bubble in human history." If you think, we can improve that section, please comment. Your oppinion is imortant for us. WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information. 25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256 Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045 , which allows provision of financial services in the United Kingdom. Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financi Continue reading >>
Wash Trading Bitcoin Part Ii: Who And Why Is Someone Wash Trading On Bitfinex?
Blog for @Bitfinexed on Twitter. Exposing fraud by largest Bitcoin exchange, Bitfinex/Tether Wash Trading Bitcoin Part II: Who and why is someone wash trading on Bitfinex? If you have not read my previous article, I have well established that wash trading is allowed by Bitfinexs trade engine and you should read that article before this one. Wash trading is an epidemic in the Bitcoin markets. For those that are not aware, a wash trade is where a person buysmedium.com Some people have asked me what is the point of wash trading on Bitfinex? People generally like to point out that in order to wash trade on Bitfinex, theyd still have to pay a fee. First, I know of at least one instance where it appears that a wash trade was not charged a fee for a trade. Second, even if a fee is charged, that doesnt mean a wash trader paying fees is really paying fees. If youre a shareholder in Bitfinex, youre allegedly paid dividends. These dividends come from fees. If youre wash trading massive amounts of Bitcoin on Bitfinex as one of these shareholders you basically get some of those fees back. If people decide to trade on Bitfinex because they see the high volumes and assume theres liquidity, you would net-profit from shilling trade volume on the exchange when they come to play. The volumes on Bitfinex will make Bitfinex appear to be better than how it really is, increasing the perceived value of your shares. Dont forget, if youre manipulating the price up with your wash trading activity, Im quite certain youll be able to cover the minuscule 0.1% fee. Basically, think of it as eBay allowing you to bid on your own items. Sure, you might end up winning your own auction and have to pay the eBay fee in a worst case scenario, but you might get other bidders to move so they dont miss out. And Continue reading >>
A Stark Warning Emerges About Bitfinex And Wash Trading
A Stark Warning Emerges About Bitfinex and Wash Trading Even though wash trading is illegal, Bitfinex continues to conduct it as a part of its operations, according to BitCryptoed , who has dedicated his time to exposing malpractice at Bitfinex. A two-part blog post outlines the suspected misconduct. The first part explains what happens and how the exchange benefits, with the second part touching on the reasons behind it. Market manipulation increases with the surging volume of cryptocurrency market. The fact cannot be avoided that fraud continues to rise along with security measures. Before proceeding, let us clear up the term wash trading. Wash trading refers to a situation where an investor buys a share/any financial instrument from a broker and sells it via another broker. This type of trading constitutes market manipulation and is not legal. Investors under wash trading buy & sell their own entity without incurring any market risk and also with the existence of such sales and purchases. According to the Commodity Exchange Act, wash trading is illegal but the bitcoin exchange Bitfinex allows it. Here is how: Order to buy/sell bitcoin or any currency Bitfinex supports trading for, Opt an order that exactly match your earlier order, At last, trading will be executed against your own order. However, if there was no wash trading, then a system of such exchange must update that your own orders are not identical. It is evident that wash trading leads for the unexpected market manipulation that is the reason other exchange platforms are not permitting it for their operations. BitCryptoed also provides some video evidence that shows what the most obvious form of wash trading looks like. An Intentional Feature of Bitfinexs Trading Engine? There is a lot of debate around cer Continue reading >>
Only One Person Cause The Price Of Bitcoin To Jump From $150 To $1,000 In 2013
Only one person cause the Price of Bitcoin to Jump from $150 to $1,000 in 2013 Only one person cause the Price of Bitcoin to Jump from $150 to $1,000 in 2013 A recent report on Bitcoin price manipulation has shown that the massive surge in 2013 that saw price move from $150 to $1,000 may have been caused by just one actor. The report which was written by JT Hamrick, Tyler Moore, Tali Oberman and Neil Gandal looked at suspicious circumstances that took place on the bankrupt Mt. Gox exchange. The report says that its very related the price increase of the Bitcoin price in 2013. The USD-BTC exchange rate went up by an average of 4% during the days when suspicious trades took place. This is compared to a decline on the days when there were no suspicious activities. The activities mainly consisted of Markus and Willy and used Bitcoins that they did not own to perform transactions that resembled valid trades. The transactions were then included in the trading volume by MT. Gox exchange. They were made to boost trading in order to show higher than normal trading activity thus attracting the public to start trading. The report went on to say that the use of the Willy bot and its trade were used as a cover in the early stages after the hack on Mt. Gox: In a Reddit post after the hack it was stated that hackers had stolen a huge number of Bitcoins in 2011 but there was a cover-up by Mark Karpeles the owner of Mt. Gox for several years. Bitcoin crypto market is always susceptible to price manipulation because of the thin price market which leaves it very vulnerable to very high price changes. We had earlier reported that there is an actor who had been manipulating the price of Bitcoin by spoofing. The actor known as spoof has also been doing wash trading which is buying and selli Continue reading >>
Single Trader With Enormous Bankroll Is Manipulating Bitcoin Price, But To What End?
Single Trader with Enormous Bankroll is Manipulating Bitcoin Price, But to What End? Single trader on Bitfinex engaging in illegal activity to manipulate the price of Bitcoin to suit his own ends Rumors are swirling about a trader with nearly unlimited funds who is manipulating the Bitcoin markets. This trader, nicknamed "Spoofy,"received his nom de guerre because of his efforts to spoof the market, primarily on Bitfinex. According to the Dodd-Frank act, spoofing is the practice of: "Bidding or offering with the intent to cancel the bid or offer before execution" In other words, spoofers place a large buy order just below other buy orders, or a large sell order just above other sell orders. The idea is to make traders think that somebody with deep pockets is getting ready to buy or sell, in hopes of moving the market. If traders see a sell order of 2000 Bitcoin, for instance, they may rush to panic sell before the whale crashes the price. The catch is this: If the price approaches the spoofers order, he immediately cancels it. Spoofing is actually illegal , but as Bitcoin markets are largely unregulated, its quite common. What is unusual in this case is the enormous bankroll that Spoofy has at his disposal. He regularly places orders approaching $60 mln. Even more unusual is that most of Spoofys activity occurs on a single exchange: Bitfinex. This exchange came under fire earlier this spring when Wells Fargo cut off their banking ties. As a result, its virtually impossible to deposit fiat on Bitfinex without going through intermediaries. Spoofy has massive sums of both fiat and Bitcoin on that exchange, and is likely one of the only traders who does. Spoofy has a number of weapons in his arsenal, including spoofing and wash trading. As BitCryptoed points out in a recen Continue reading >>
Bitcoin Slump Matches Broader Markets, Urging Regulators To Tighten Oversight
Bitcoin Slump Matches Broader Markets, Urging Regulators to Tighten Oversight Bitcoin prices bottomed out Monday in near lock-step with the Dow, suggesting a tighter correlation to mainstream markets that could invite more stringent oversight from financial watchdogs. Bitcoin prices traded below the $6,000 level for the first time since early November Tuesday as investors dumped digital currencies amid a sell-off that has exposed cryptocurrencies to movements in broader financial markets. Bitcoins were marked at $6,200 each on the bitstamp exchange in Luxembourg, which feeds prices into the CME Group futures contract, by mid-day in Europe, down 8.7% from Monday's close and more than 67% from its all-time peak of $19,187 on Dec. 16. Bitcoins traded as low as $5,920.72 each during the Tuesday session, taking the corresponding declines in other digital coins, including ripple and ethereum, and the global cryptocurrency "market cap" to $300 billion - around a third of the value it commanded at its mid-December peak, according to Coinmarketcap.com data. Interestingly, Bitcoin prices appear to be moving in tandem with more mainstream markets, with prices dropping to a session low of $6,500 Monday just as the Dow Jones Industrial Average plunged 1,500 points near the close of trading. Both recovered losses by the closing bell, although the Dow still gave back 1,175.21 points, or 4.6%, in one of the biggest single-day declines in six years. That has some market observers wondering how closing bitcoin prices might represent retail participation in stocks, particularly given the fact that FINRA member firms margin debt hit a record $642.7 billion in December, according to the most recent data, after rising 16.7% over the whole of 2017. If the recent market declines -- which have Continue reading >>
Bitcoin 'nuts' Will Hold Cryptocurrency Until Price Plummets To Zero - Dr Doom Nouriel Roubini
Nouriel Roubini (@Nouriel) February 6, 2018 Pointing to bitcoins slide, the economist posed the question on Twitter whether authorities like the US Securities and Exchange Commission (SEC) wouldstart looking into these criminal activities? He used the term HODL, which stands for hold on for dear life and originated in an online forum when someone spelled the word "hold" wrong. HODL has become a meme that is often used in times of extreme volatility in the cryptocurrency market for people holding rather than selling. Roubini said that"HODL nuts"will hold bitcoin until it plummets to zero. In November, Dr Doom warned that the cryptocurrency will become so regulated that it wouldfind its end. As Bitcoin crashes to a $5K handle the wash traders move rapidly into action to prop it up...price and quantity action now clearly consistent with criminal wash trades...will the SEC and CFTC start looking into these criminal activities? Nouriel Roubini (@Nouriel) February 6, 2018 In my opinion, there is a gigantic speculative bubble related to bitcoin because this is neither a serious method of payment nor a good way to store capital,he said.Bitcoin feeds on itselfand there are no fundamental reasons for its price to reach such levels, Roubini explained. Since hitting $20,000 six weeks ago, bitcoin has lost more than two-thirds of its value, plunging to $6,000 on Tuesday. Other major digital currencies are also well off their all-time highs. For more stories on economy & finance visit RT's business section Continue reading >>
Study Finds $3b Worth Of Faked Cryptocurrency Volumes And Wash Trades
Study Finds $3B Worth of Faked Cryptocurrency Volumes and Wash Trades On March 10 a cryptocurrency trader and researcher published a report on how he believes $3 billion worth of cryptocurrency trade volumes, primarily from a couple of exchanges, are concocted. The author of the study, Sylvain Ribes, alleges that the exchange Okcoin has been fabricating up to 93 percent of its trade volumes. Also read: Thailand Dodges Extreme Cryptocurrency Regulations Sylvain Ribes has published a study that reveals some interesting information about trade volumes stemming from exchanges like Okcoin (Okex) and Huobi, which may be falsifying their trade volumes. Ribes calculated his data from order books across all major exchanges to measure how badly market selling $50k USD worth of each cryptocurrency would crash the price. Further Ribes refers to a term called slippage, which he defines as the percentage change between the observed mid-spread price and the lowest price I had to consent to sell the asset. Throughout Ribes research of various currency volumes coming from exchanges like GDAX, Bitfinex, Kraken, Binance and more he found vast inconsistencies between trading platforms. I found ridiculously massive discrepancies between exchanges. Not the kind that can be easily hand-waved away (oh well, their users must behave differently), but the kind that can only be explained by some figures being overstated as much as 95%, explains Ribes study. Leading the pack is Okex, currently ranked #1 exchange by volume with $1.7b total volume on both Coinmarketcap and Livecoinwatch websites. Orange, dark blue and light blue dots are GDAX, Bitfinex,and Kraken. Red dots are Okex. The exchange Okex is a ghosttown says Ribes. A Suffocating Majority of Okex Volume Is Fake Okex volumes raised a red f Continue reading >>
Bitcoin Tax Guide: Trading Gains And Losses - Wash Sales: Impossible To Track?
Bitcoin Tax Guide: Trading Gains And Losses - Wash Sales: Impossible To Track? Bitcoin Tax Guide: Lost Or Stolen Bitcoins As if the bitcoin tax situation werent complex enough, theres at least one more interesting feature of digital currencies because of their status as property. This is the concept of wash sales , situations in which a taxpayer sells off an investment, realizing a tax loss, and then immediately buys it back at a bargain price. Wash sales typically apply to stocks and securities, o its unclear exactly how it will impact bitcoin and other digital currency traders in the years to come. Because bitcoin is not considered a stock or security, the IRS would likely only go after investors for non-economic substance transactions which cover broader property rules. The fact is, most traders make investment decisions in bitcoin and other digital currencies because of market-moving news and based on the wide swings in price levels of these currencies, not for tax purposes. Because of that, it is unlikely that bitcoin traders would be penalized by the U.S. government under these rules. Should the IRS eventually close off the wash sales loophole, which would potentially have implications for a bitcoin investor. He or she would need to wait at least 30 days before buying more bitcoins in order to realize a loss on another sale of his holdings. Depending upon the exchange and the wallet that our sample investor makes use of, the IRS will probably be able to catch him if he tries to claim improper losses on wash sales. More likely, though, and given the global, decentralized nature of digital currencies and their exchanges, it would be very difficult for the IRS to flag him for under-reporting on wash sales. This doesnt even take into account cold storage, referring t Continue reading >>
Meet Spoofy. How A Single Entity Dominates The Price Ofbitcoin.
Blog for @Bitfinexed on Twitter. Exposing fraud by largest Bitcoin exchange, Bitfinex/Tether Meet Spoofy. How a Single entity dominates the price ofBitcoin. This story is about a trader, or a group of traders, or possibly even Bitfinex themselves manipulates the price of Bitcoin. The past few months Ive slowly collected screenshots of a trader I like to call Spoofy. Youll see evidence of spoofing, wash trading, a sketchy scheme associated closely with Bitfinex known as Tether among other shenanigans. Spoofy makes the price go up when he wants it to go up, and Spoofy makes the price go down when he wants it to go down, and hes got the coin both USD, and Bitcoin of course to pull it off, and with impunity on Bitfinex. Phil Potter referred to me in an interview on August 6th, and claimed they have not seen the kind of activity Im talking about. This is a video showing activity on July 22nd, 2017 and contains Phil Potters comments along activity that he claims isnt happening. Spoofing & Trading manipulation on July 22nd. Since March 2017, Ive been warning people about the issues regarding Bitfinex and their disconnection from the traditional banking system. The issue regarding Bitfinexs banking woes is essentially on the backburner as prices have gone up significantly since then, but in my opinion, this is a very big driver of why the price of Bitcoin is exceedingly easy to manipulate. Spoofy is a regular trader (or a group of traders), that function primarily on Bitfinex, and in a limited fashion on some other exchanges who engages in the following practices: Places large bids ($2 million and up) for Bitcoin, usually just under a smaller bid order, only to remove them once someone starts to sell. These orders usually have a lifetime of minutes, or sometimes as short as 51 Continue reading >>
Bitcoin: Evidence Of Spoofing, Wash Trading, And A Scheme Known As Tether | Hacker News
The title and the sensationalist wording of the article is complete nonsense. Yes, placing a large order might be interpreted as a signal by some traders and it might be possible to take advantage of that. But that does not mean somebody dominates the price of Bitcoin. By the same logic you could say that HN posts dominate the price of Bitcoin because some traders might use them as a signal. Not only that, he has zero evidence that it's one entity. He has zero evidence that he doesn't let these orders execute. Bitfinex is the second largest bitcoin exchange, their daily volume is $130 million . $2-4M trades are not anything out of the ordinary. Why exactly is spoofing illegal? How do you differentiate legitimate order canceling from spoofing? Trading is very emotional process. You place order, 5 minutes later you decide to cancel it, 10 minutes later you decide to place another order. I think it doesn't make any sense for this kind of activity to be illegal, and I don't see much wrong with it. It would be impossible for exchanges to differentiate between spoofing or legitimate trading anyway. Intent. How do you differentiate hacking from legitimate access? You're just sending byte streams to the server and it decided to give you access to something, after all. The reason it's illegal or banned on normal exchanges is because it drives out legitimate customers and you end up with a den of thieves. Everybody looks at the order book to gauge liquidity and make decisions, not just bots. Users want prices to be relatively stable and tied to fundamental values. An exchange where manipulators spoof or wipe the order book in a high stakes game of chicken is unstable. Imagine an eBay with no protections against counterfeit goods, or a StubHub full of fraudulent tickets. And s Continue reading >>
Bitcoin Warning! How Bitfinex, Tether Risk Crashing Global Crypto Markets.
BITCOIN WARNING! How Bitfinex, Tether risk crashing global crypto markets. JOHANNESBURG As the Bitcoin bulls continue to run with the price sailing past the $12 000 mark and approaching $13 000 at the time ofwriting, theres a corner of the internet that is starting to seriously ring the alarm bells. While futures trading (which will start as early as December 10) is theoretically set to introduce more bears into the market and, possibly, a more stable Bitcoin price; theres a major exchange based in Hong Kong and Taiwan dubbed Bitfinex that is beginning to send shivers through some sceptics spines. Bitfinex, on its website, describes itself the worlds largest and most advanced bitcoin trading platform. And according to data from crypto measuring site data.bitcoinity.org , Bitfinex has dominated the worlds Bitcoin trade on exchanges, with a 41.72% market share over the last seven days. (The next biggest player is the US-based exchange, Coinbase , with25.78% market share.) But looking at Bitfinexs history, theres cause for concern.In May 2015, 1 500 bitcoins were stolen from Bitfinex during a hack. Then in 2016, Bitfinex was the subject of another hack in which $72m worth of bitcoin was stolen. Also, Wells Fargo dumped Bitfinex earlier this year, resulting in Bitfinex experience problems in its banking services. But wait, theres more. There are also concerns over Bitfinex not being completely transparent about being key in creating and establishing a cryptocurrency called Tether (USDT), which is intended to be pegged to the US dollar at a rate of 1:1. There are now questions about whether Tether itself is backed with sufficient funding in case of a run on the markets (and in some instances if you even just want to withdraw dollars out of Tether). There are also question m Continue reading >>
Are Tethers Again Backing The Bitcoin Re-bounce?
Are Tethers Again Backing the Bitcoin Re-Bounce? Since January 14, a total of 450 million USDT has entered circulation with new issues. The latest issue of USDT tokens happened only hours ago, as Bitcoin bounced above $11,000 once again. The cryptocurrency market was all in the green, with powerful re-bounces of all assets. BTC went up more than 11% to $11,745.60, just as more Tethers were being sent out immediately. Tethers are not only affecting the price of Bitcoin, but making their way into Binance, as an additional boost to liquidity. Tethers serve as a source of credit financing for Bitcoin, and thus cause a disproportionate rise in prices. Bitcoin Will Fall, Say Experts at Capital Economics There has also been indication that users may be buying Tethers for cash through Kraken, possibly as a means of participating on exchanges. While there are other crypto coins, for now USDT is still relatively easy to move, making it possible to pick and choose exchanges. Tethers may be affecting even more assets, as now there is a NEO/USDT trading pair on Binance, one of the hottest, most sought-after exchanges, which hosts some of the most rapidly appreciating assets of the past months. Tethers seem to become even more popular with Asian exchanges like OKEx, Huobi, and Binance. But the chief market for margin trading using Tethers remains Bitfinex. After a few days of actively adding USDT to the market, the trading pair is the third most active in the world. There are now 1.65 billion USDT in circulation, with record trading volumes above $4.9 billion, and record volumes of more than 423,000 BTC. The circulating supply of USDT is the most actively traded token, going though all coins outstanding more than twice in 24 hours. Did they run out of Tethers to pump? Might explain Continue reading >>